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Creation of a Unified Revenue Agency in Bulgaria
The Ministry of Finance is currently drafting legislative amendments necessary for establishing a new mega-organization that will merge the National Revenue Agency (NRA) with the Customs Agency. According to the proposed timeline, the relevant legislation is expected to be in place by the end of this year. Until then, activities must be carried out to ensure the uninterrupted operation of the future unified revenue agency, focusing on the service to citizens and businesses, as well as the integration and training of the administrative staff.
Phased Integration Plans
In the second phase of the Ministry of Finance’s plan, anticipated to commence after January 1, 2025, the gradual integration of specialized administrative units is expected to begin, including the merging of information and network systems. This information was shared by Finance Minister Lyudmila Petkova in response to a parliamentary inquiry. These are the first public deadlines announced by the Ministry regarding the proposal for the creation of a unified revenue agency. While the concept is not new, it was revitalized by former Finance Minister Asen Vassilev, who argued that unified revenue agencies are more effective in revenue collection, citing examples from several EU countries with similar operational models.
The Merging Process: Historical Context
Initially, discussions centered around merging both structures; however, in her response, Petkova indicated that the Customs Agency will be absorbed into the NRA. This suggests that Rumen Spetsov, the current director of the NRA, may likely remain at the helm of the new organization, provided he retains his position in subsequent governments. The idea of merging the NRA and Customs first emerged during the cabinet of Plamen Oresharski, with Finance Minister Petar Chobanov from the DPS party. When Boyko Borissov’s second cabinet took office, with Vladislav Goranov serving as finance minister, the merger of the NRA and Customs was prominently highlighted as a priority for the government.
Challenges and Revenue Collection Issues
During that time, efforts to unify the two agencies commenced, but the government later abandoned the initiative, citing an increase in customs revenue collection. Similar to that period, the current proposal arises amidst declining revenue collection rates from the agencies. Last year, the Ministry of Finance fell short of collecting approximately 1.2 billion BGN from projected revenues, despite these projections being set only in June due to delays in budget approval. The shortfall was largely attributed to VAT revenues from imports, for which the Customs Agency is accountable. Statistics from the Ministry of Finance as of the end of June this year indicate a significant lag in tax revenues, with only 44.9% of the first half of the year’s targets met. During a parliamentary control session in June, Minister Petkova signaled that VAT revenues might again fall short this year.
Current Status of the Merger
As of now, a thorough review and analysis of the activities of the specialized administration within both agencies is underway to clarify overlaps and explore opportunities for process and activity consolidation. Discussions are also focusing on the future development of functions within the unified revenue agency, as well as the types of documents that will be utilized post-merger. Information assets and networks are being analyzed, and options for data migration are being developed to ensure network and information security.
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